Yara postpones Belle Plaine expansion project
Yara International ASA announced on June 14 that it is postponing the planned expansion project at its production plant in Belle Plaine, Canada. Yara views the Belle Plaine site in Saskatchewan as an optimal location for a future North American nitrogen expansion, but will spend more time evaluating construction cost development and other key project parameters.
“We are not ready to initiate a Belle Plaine expansion today, primarily due to recent increases in construction cost both in Canada and North America generally,” said Jørgen Ole Haslestad, Yara president and CEO. “There is also a significant risk of future nitrogen over-supply in North America as new project initiatives are announced, despite deteriorating project profitability.”
The Yara Belle Plaine facility has current production capacity of 0.7 million mt/y of ammonia and 1.2 million mt/y tons of urea and UAN. The planned expansion project comprised an integrated world scale ammonia and urea line that would have added approximately 1.3 million mt/y of urea capacity.
“Yara’s growth options remain significant, including a number of opportunities for profitable investments in value-added product capacity, downstream facilities and plant de-bottlenecking projects,” said Haslestad. “We also expect to find profitable commodity nitrogen growth opportunities going forward, and a future Belle Plaine expansion remains an option for Yara when the construction cost situation improves.”
Yara’s announcement follows Agrium Inc’s decision in early June to suspend engineering development on its proposed $3 billion nitrogen greenfield project in the U.S. Cornbelt (GM June 10, p. 1). Agrium stressed that the project, which would produce roughly 1.8 million mt/y of primarily urea and UAN, was still on the company’s radar, but it had decided instead to focus on efforts to secure a strategic partner and a gas contract for the project at this time.
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